The parliamentary portfolio committee on public enterprises has expressed its dissatisfaction over a report that was presented by Transnet’s port and rail operator on its overall business.
Transnet announced in January that it was planning to approach the market for the lease of its 670km run of double-track electrified rail container corridor for 20 years, noting that it does not have enough capital to keep the business running.
According to parliament’s media officer Yoliswa Landu, Transnet CEO Portia Derby said Transnet has approached markets seeking qualified parties interested in leasing the company’s operation of the container corridor.
However, the committee decried the approach, saying the government has not given an approval for Transnet to privatise any of its businesses.
“Members of the committee responded saying the government had not instructed Transnet to privatise any of its business and should rather concentrate of developmental projects. Committee members expressed their frustration that Transnet is not following government’s mandate for state-owned companies,” said Landu.
“The committee said from their analysis of the report presented, it appears Transnet intends to give slots through the lease arrangement because the slots are not profitable.
“However, the committee questioned why the private sector would invest in an unprofitable business. Transnet replied that it is experiencing many financial challenges and various other constraints. However, Transnet emphasised it is not privatising.”
The committee concluded not to entertain the report after Khaya Magaxa, chairperson of the committee, argued that committee members would need to assess Transnet first.
“There is more we need to uncover as to what is happening within the company. You are responsible to ensure the policy of government gets implemented, and if you are not doing that, what is it that you are doing on a daily basis?”
The EFF previously rejected the proposal, stating that the strategic corridor was built with taxpayers’ money to improve industrialisation and the country’s economy, and noted that it would be an act of “greed and senseless profiteering” to outsource it.
“The intention to outsource such a strategic line of business to the private sector by Transnet is to support the extractive neo-colonial economy that continues to steal Africa’s mineral resources for the benefit of America and Europe,” said EFF spokesperson Sinawo Thambo at the time.
“Failure to implement a comprehensive infrastructure expansion and maintenance plan undermined Transnet’s operations on all fronts.”
Thambo said there is no guarantee that outsourcing the corridor would improve the company’s operations.
“Transnet used to have the capacity to move over 200-million of cargo on an annual basis. There is no justification or evidence that outsourcing such a strategic and crucial function of Transnet will radically improve its operation.
“The sabotage of Transnet, in particular its build programme that was beginning to integrate sub-Saharan Africa and the rest of the continent through the creation of competitive corridor supply chains meant to integrate ports and railways, is driven by greed.
“Transnet is a public strategic asset built with taxpayer money to support industrialisation efforts for the benefit of all South Africans.
“To allow the outsourcing of such an important strategic line to be turned into a profit-making function when it was supposed to be meant for greater good is reactionary and confirms that Cyril Ramaphosa’s prepaid presidency is paying its funders at the expense of workers and all South Africans.”
Thambo is arguing that many state-owned entities that were previously outsourced or privatised were impaired, flagging corruption and maladministration.
Also read: EFF rejects Transnet’s plan to outsource container corridor
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